Commercial Disputes and Mediation — The Mandatory Mediation Procedure
Mandatory mediation as a condition of action in commercial disputes was added to TTK Art. 5/A by Law No. 7155 and entered into force on 1 January 2019. From 1 September 2023, actions for annulment of an objection, negative declaration and restitution were expressly added to claim and compensation actions whose subject is a sum of money. The general procedure is governed by HUAK Art. 18/A and the commercial scope by TTK Arts. 4 and 5/A; labour and consumer disputes have their own separate condition-of-action regimes.
What Is Mediation and Why Is It Mandatory in Commercial Actions?
Mediation is a means of dispute resolution in which an impartial and independent mediator helps the parties, using systematic techniques, to communicate and generate solutions, with the power of decision remaining with the parties. In mandatory mediation what is required is not to reach agreement but to complete the statutory application in proper form.
The commercial condition of action was added to TTK Art. 5/A by Law No. 7155 and entered into force on 1 January 2019. Its purpose is to offer the parties a swift, consensual solution before litigation. The mediator concludes the application within six weeks of the date of appointment; that period may be extended by a maximum of two weeks where necessary.
Which Commercial Disputes Fall Within Mandatory Mediation?
Under TTK Art. 5/A, application to a mediator before bringing an action is a condition of action in claims, compensation, annulment of objection, negative declaration and restitution actions that are commercial actions under TTK Art. 4 and other statutes. Since 1 September 2023 the provision has expressly covered actions for annulment of an objection, negative declaration and restitution.
That a dispute counts as a commercial action does not of itself bring every claim within the scope; the claim must be of one of the types of action listed in the statute. Where arbitration or another alternative dispute resolution route is mandatory, or where there is an arbitration agreement, the exception in HUAK Art. 18/A is observed.
How Is the Application Made?
The application is made to the mediation office at the place of the court having jurisdiction over the subject matter of the dispute; where there is no such office, to the registry of the designated civil court of peace. An objection to venue is raised at the first meeting and assessed under the procedure in HUAK Art. 18/A. When the action is brought, the original of the final record or a copy certified by the mediator must be attached to the statement of claim; if the deficiency is not remedied within a strict period, the action is dismissed on procedural grounds.
How Are the Mediation Meetings Conducted?
Once the mediator has accepted the appointment they invite the parties to a meeting, explain the principles of the process and conduct the negotiation impartially. The parties may attend in person or through their legal representatives or attorneys; the authority of the person representing a company to settle and to conclude an agreement should be checked. The mediator may help to develop options for settlement but cannot give a binding decision.
Between the beginning and the end of the mediation process, limitation is suspended and forfeiture periods do not run; for the purposes of the condition of action, HUAK Art. 18/A/15 applies. A document that exists independently of the mediation does not lose its evidential character merely because it was used in the process. The scope of confidentiality and the prohibition on the use of evidence are assessed separately under HUAK Arts. 4–5.
How Long Does the Process Take?
The mediator concludes the application within six weeks of the date of appointment; the period may be extended by a maximum of two weeks where necessary. The expiry of the period does not prevent the parties from reaching agreement; but for the condition of action to be satisfied, a final record is drawn up. From the application until the final record, limitation is suspended and forfeiture periods do not run.
What Are the Agreement and Non-Agreement Records?
The agreement document is signed by the parties and the mediator. One of the parties may request an annotation of enforceability from the competent court. An agreement document signed jointly by the parties, their attorneys and the mediator is treated as a document having the force of a judgment without any annotation being required. The cases in which the statute specifically requires an annotation from the civil court of peace — such as agreements on the transfer of an immovable or the creation of a limited right in rem — are reserved.
The parties may not subsequently bring an action on the matters agreed. Where no agreement is reached, the final record shows only that the meeting did not result in agreement and the matters the statute requires to be recorded; the parties' confidential statements are not entered in the record.
What Are the Legal Consequences of Failing to Attend the First Meeting?
A party who fails without valid excuse to attend the first meeting is held liable for half the litigation costs in any action brought, even if they succeed in whole or in part, and only half of the attorney's fee is awarded in their favour. If neither party attends, each bears their own litigation costs. These consequences apply under the current HUAK Art. 18/A regime, which entered into force on 12 March 2024.
Confidentiality and the Prohibition on the Use of Evidence
The mediator, the parties and others participating in the process keep confidential, unless otherwise agreed, the information and documents submitted to or obtained by them within the mediation (HUAK Art. 4). The statutory exceptions to the duty of confidentiality, disclosures necessary for the implementation or enforceability of the agreement, and special reporting obligations are construed narrowly on the facts.
HUAK Art. 5 prohibits the subsequent use as evidence of, or testimony about, the invitation to mediate or the wish to participate, the views and proposals advanced in the process, offers, statements of acceptance and documents prepared solely for the mediation. Evidence accessible independently of the mediation does not become unusable merely because it was produced at a meeting. The generalisation that “no information or document from the meeting may be used in any action” is therefore incorrect.
Mandatory and Voluntary Mediation
Mediation is examined in two categories in the Turkish legal system: mandatory and voluntary. In mandatory mediation, applying to a mediator before bringing an action is a statutory requirement (a condition of action). In voluntary mediation the parties apply of their own volition; there is no statutory requirement.
Mandatory mediation applies under TTK Art. 5/A (commercial actions), Art. 3 of Law No. 7036 (labour actions) and the Consumer Protection Law No. 6502 (consumer actions). Voluntary mediation may be used in any private law dispute over which the parties may freely dispose.
In both types of mediation the conduct of the process, the principle of confidentiality, the mediator's impartiality and the legal nature of the agreement document are the same. The fundamental difference is whether the application is mandatory or voluntary. In voluntary mediation the parties may end the process whenever they wish, whereas in mandatory mediation the process must be completed and a record drawn up.
How Are Mediation Fees Determined and Who Bears Them?
The fee is determined by the Minimum Mediation Fee Tariff in force at the date of the meeting. Where agreement is reached it is shared equally unless otherwise agreed and may not fall below the tariff. Where no agreement is reached, the fee for the first two hours is met from the Ministry of Justice's budget; the part exceeding two hours is paid equally by the parties unless otherwise agreed. Rather than giving a fixed amount, the 2026 tariff and the value of the dispute should be used.
Frequently Asked Questions
In which commercial actions is mediation a condition of action?
In commercial claims, compensation, annulment of objection, negative declaration and restitution actions.
How long does the process take?
Six weeks; with a maximum additional two weeks where necessary.
What is the consequence of failing without excuse to attend the first meeting?
The non-attending party is liable for half the costs even if successful, and only half the attorney's fee is awarded in their favour.
Can an action be brought on a matter that has been agreed?
No; under HUAK Art. 18/A the matters agreed cannot be made the subject of a fresh action.
This article was prepared by Av. Mehmet Serhat MALGIR.
